It has been the common consensus that development on The Last Guardian had stalled however; according to Sony company head, Shuhei Yoshida, it is being re-engineered by a "well-staffed" team.

Yoshida let out no hint to what exactly was being re-engineered but he did state that State is waiting to reintroduce the game "in an appropriate way".

So, we're waiting for the right time to re-introduce The Last Guardian in an appropriate way. I can't... Well, the game is in development, and it's well staffed, and [Fumito] Ueda-san is here, working - even though he's not a Sony employee, he's dedicated to the product. But we're not ready to update yet.- Shuhei Yoshida

Yoshida then went onto say that the game has never had a hiatus and has always been in development, just with a smaller team of developers.

That hiatus term - I'm not a native English-speaking person - but that's misleading. The game is in active development. [Fumito] Ueda-san shared updates a few months ago. Nothing has changed. My answer is, 'Yes, the game is in active development.' It's not hiatus at all. But we are not ready to reintroduce it. When we are ready, we will do that. Please wait- Shuhei Yoshia